Teens Are Shopping — Just Not At Traditional Malls

While Coach, Kate Spade and Michael Kors merchandise is sold in
department store such asMacy's (in addition to dedicated
boutiques), teens and their families have been flocking to
outlet malls in search of designer duds.

Traditional mall traffic may be weak this summer, but outlet
malls appear to be faring better. At Simon
Property's Woodbury Common in Central Valley, N.Y.,
young adult shoppers patiently stood in lines outside Michael
Kors, Tory Burch, Kate Spade and other designer stores.

"I've been to Under Armour, North Face, Michael
Kors—probably going to Coach and Nike," said Gabrielle Perry, a 16-year-old from
New Jersey. "Michael Kors has bags for 50 percent, and they are
nice bags, too."

Claire Muldren, 20, is also a Kors fan. She left the store with
a new iPhone 5 case, and her friend is hunting for a high-end
wallet "for school and going out."

"The vacancy rates in outlet malls right now are running about
5 percent," while vacancy rates on the traditional retail side
are "somewhere between 10 and 15 percent," said Ken Lombard, a
partner at Capri Capital Partners. "The retailers that are a
part of these outlet malls are seeing more success in terms of
sales."

'Back-to-school Saturday'

That's why some are hoping promotions and events may draw
teenagers back to the mall.

Saturday marks the second annual "Back-to-School Saturday."
Fifty shopping centers owned by Simon Property and 20 owned
by General Growth Properties are participating
in the event, created by Teen Vogue.

Organizers say 45,000 stores throughout the country will be
offering promotions. Social media will also play a role, with
activated ads and editorial features promoted on Facebook, Instagram and Twitter.

In a note to clients, Jefferies analyst Daniel Binder said that
although the industry had a slowdown in sales after Father's
Day, he doesn't see it as the beginning of a downward trend.

"We think the consumer has a propensity to shop closer to
need," Binder said. "We have seen this in many instances since
the Great Recession, and we only have to look to first quarter
and early second quarter to see when it happened last. We may
witness this again as consumers shop late for back-to-school."

That could mean big-box retailers like Walmart and Target may be able to sell school supplies
and backpacks before new sneakers and fall jackets make their
way to the checkout lane.